Colorado will rewrite medical marijuana business rules

The state agency charged with policing medical-marijuana dispensaries is preparing a broad rewrite of its rules for the businesses, just as the state begins to contemplate regulation for recreational marijuana stores.

In an announcement on its website, the Department of Revenue’s Medical Marijuana Enforcement Division, or MMED, promises to release a draft of the rewritten rules by Dec. 28.

“Based on industry feedback, and its own experience, the MMED has determined that the majority of the existing medical marijuana rules … are in need of amendment,” the announcement states.

MMED spokeswoman Julie Postlethwait said the division will hold three public forums to discuss new rules, with the first coming Jan. 11.

“We’re trying to be very inclusive,” Postlethwait said. “We’re going to be reworking the rules and amending them, which is very common, especially when you have such a new program.”

But, while Postlethwait said the rewrite is routine, it comes as serious questions are being raised about whether existing rules are enforceable. The rules are receiving extra scrutiny now that Colorado voters have passed Amendment 64, a measure that legalizes marijuana sales at stores intended to be regulated similarly to medical-marijuana dispensaries.

On Thursday, an El Paso County jury acquitted dispensary owner Ali Hillery of felony charges of marijuana cultivation and possession with intent to distribute. Prosecutors accused Hillery of growing more marijuana plants for her dispensary than state law allows. Dispensaries are allowed to grow six plants per patient who has signed up with the dispensary.

Hillery’s attorney, Sean McAllister, said the problem is that dispensary owners have no way of knowing how many patients have signed up. Patients switch dispensaries frequently, the state is months behind in processing those transfer documents and, regardless, there’s no system to inform dispensaries of their current patient count.

“The takeaway from this trial is that the emperor has no clothes,” McAllister said. “The regulatory system is baiting people into violating the law.”

“Every dispensary in the state potentially has more plants than patients,” he added.

McAllister said he represents three other dispensary owners facing criminal charges in Colorado Springs for similar accusations. Another dispensary owner he represented worked out a plea deal to avoid the cost of fighting the charges, McAllister said.

As Hillery’s trial loomed, McAllister filed a lawsuit asking the MMED to clarify its rules on plant counts. It since has, McAllister said. But he said the rules rewrite shows the MMED is uncertain how best to regulate the industry.

“This agency is still figuring out what the law is,” he said.

McAllister, though, said he is hopeful regulation of recreational marijuana stores will be less chaotic. Amendment 64 does not impose plant limits on stores or require people to designate just one store to grow marijuana for them.

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